The Government Spends Billions on Food. Who Benefits?
Last week, lawmakers in both the House and Senate introduced legislation that could transform the agency’s food purchasing processes, directing the USDA to seek out not just the most affordable foods but also to consider factors including supply chain resiliency, environmental impact, and labor policies when deciding which companies are on the receiving end of […]
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The U.S. Department of Agriculture (USDA) has an array of programs aimed at helping farmers grow food that supports rural communities and the environment, but its own purchasing has long revolved around sourcing the cheapest foods available.
Last week, lawmakers in both the House and Senate introduced legislation that could transform the agency’s food purchasing processes, directing the USDA to seek out not just the most affordable foods but also to consider factors including supply chain resiliency, environmental impact, and labor policies when deciding which companies are on the receiving end of the billions of dollars it spends on food each year.
“USDA has an opportunity to use its sizable purchasing power to address our agriculture sector’s compounding crisis of agri-business consolidation, climate change, and worker mistreatment,” said Senator Edward Markey (D-Massachusetts), a lead sponsor of the bill in a press release.
Called the EFFECTIVE Food Procurement Act, Markey’s proposal follows another bill, the Strengthening Local Meat Economies Act, introduced by John Fetterman (D-Pennsylvania) in September. After a ramp-up period, Fetterman’s legislation would require the USDA to purchase at least 20 percent of its meat and poultry from small and mid-sized processors and to prioritize contracts with regional producers, socially disadvantaged farmers and ranchers, and companies that have fair labor agreements in place.
Both pieces of legislation, which face long odds of getting included in next year’s farm bill, represent a push to better use federal purchasing power to accelerate progress on goals that the Biden administration has stated are key to its policy vision, including climate action, equity, and improving competition and resilience.
And they’re linked to a larger movement to shift institutional and government food purchasing that has taken root in cities and states around the country, said Chloe Waterman, the senior program manager of the climate friendly food program at the nonprofit Friends of the Earth. The organization is one of several environmental, food, and farm groups that joined forces to create the Federal Good Food Purchasing Coalition about a year ago.
“We got together and said, ‘We now have a decade’s worth of proof-of-concept for this idea of values-aligned food procurement. The federal government is a way bigger player than any of the cities or municipalities or school districts that we’re working with. So, how can we bring this strategy to the federal level?’” she said.
The coalition released its first report earlier this month, which traces how the government spent nearly $17 billion on food in two separate years, 2019 and 2022. And it found that despite an executive order directing agencies to consider greenhouse gas emissions in procurement, another addressing consolidation, and hundreds of millions of dollars granted to small and mid-size farms and processors over the past few years, the government isn’t exactly putting its money where its mouth is.
According to the analysis, the USDA is by far the largest purchaser within the federal government, with programs for school meals, domestic hunger, and foreign aid accounting for more than half of total government food spending. In 2022, USDA spent nearly half of its food dollars with just 25 vendors, several of which represent the same multinational food companies the Biden administration has called out for exploiting American farmers.
The USDA spent the most money—6 percent of its total purchases, or $270 million—on food from Cargill, which is the country’s largest private company and has long been accused of creating unfair markets for farmers and perpetuating deforestation in South America. Tyson, recently the subject of a major child labor investigation, took in $248 million, including 43 percent of dollars spent on poultry and was among the top five beneficiaries of spending on pork.
Interestingly, the largest contracts for beef did not go to any of the country’s biggest meatpackers, although some of the companies are processors that could be sourcing animals from slaughter facilities owned by the big four. (The EFFECTIVE Food Procurement Act would also require the USDA to provide more transparency around its purchasing.) While it wouldn’t affect numbers from the past, the agency did recently commit to only buying red meat from cattle raised in the U.S.
But that won’t impact its relationship with JBS USA, a subsidiary of the Brazilian meat giant. In 2022, the USDA spent more than $60 million on pork and chicken from JBS and its poultry company, Pilgrim’s Pride. More than a year ago, lawmakers asked the USDA to end contracts with the company based on accusations of criminal behavior, including bribing government officials and using child labor in its supply chain. However, Agriculture Secretary Tom Vilsack declined, stating that it would “potentially impair” the agency’s ability to secure affordable food.
To Waterman, that is precisely why change is necessary.
“If we can’t even cut out or suspend purchasing from one vendor who’s a particularly bad actor, what does that say about like the resiliency of that supply chain and the lack of diversification in it?” she said. To illustrate the alternative approach, when Senator Fetterman introduced his bill to diversify the USDA’s meat purchasing, groups supporting the legislation created a map that showed the hundreds of small and mid-size processors that could be tapped instead. Many of those businesses recently received grants from USDA to expand and/or stay open.
A map of the small and mid-sized processors that could supply the USDA with its meat needs.
The report also analyzed greenhouse gas emissions from USDA purchasing and concluded that shifting more dollars toward plant-based foods (pulses, including beans, lentils, and tofu are a particularly tiny slice of current purchasing) could provide a variety of benefits that match the administration’s priorities. For example, it found that replacing 50 percent of beef purchases with plant-based proteins would cut greenhouse gas emissions by 15 percent, land use by 16 percent, water use by 5 percent, and costs by 2 percent.
“Our analysis included this cost element to show that you can reduce emissions and save . . . while also achieving benefits along every metric that we included,” Waterman said.
To date, more than 200 organizations have endorsed the EFFECTIVE Food Procurement Act, while 65 have endorsed the Strengthening Local Meat Economies Act. But the bills are partisan, with no backing from Republicans. And with the farm bill process punted to next year and still no end in sight on the many spending bills Congress plans to pass, their future remains uncertain.
That’s not to say that, if enough momentum built up, the agency couldn’t start to shift its purchases on its own, Waterman said. “Even just from the numbers that we found, it does appear that USDA is moving in the right direction, and they have stated that they share some of the goals of diversifying their supply chains,” she said. “I just don’t think that they’re doing it fast enough.”
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